Jugnoo, which recently raised US$3 million in funding, is already present in 22 cities across the country
As competition is getting tougher in India, global as well as domestic cab booking giants Ola and Uber made an entry into auto rickshaw booking a few months ago to find new business opportunities. But, unable to get a grip on the steering wheel, the latter announced its departure from the Indian three-wheeler segment recently.
While US-based Uber’s (which has billions of dollars in hands) exit has raised many questions on the feasibility of this business, a small-town startup Jugnoo is making in-roads into what it dubs to be a lucrative vertical — making a strong statement that rickshaw is something that only a domestic player can crack in India.
“The taxi aggregators are aggressively trying to hold their stakes in this sector, but auto-rickshaw aggregation is an area that we felt can aid towards making local commute much more convenient by making use of this source which is abundantly available,” says Samar Singla, Co-founder of Chandigarh-based Jugnoo.
“This is an area which still has a room for growth because maximum of India’s population makes use of this source for local travel and since we have an ease of access to technology, it made sense to a build a platform which integrates both, a concept which has helped both the customers and the auto rickshaw drivers,” he adds.
The startup was established in November 2014 by Agarwal and Singla — both alumni of IIT Delhi.
Everyone needs an auto in India
Jugnoo is targetting students, working professionals and masses that are dependent on public transport for their daily conveyance. The firm claims to have approximately 3,300 plus autos registered with it.
Recently, Jugnoo raised US$3 million from SoftBank-backed Paytm, and Kunal Shah, Co-founder of Freecharge (a Snapdeal-owned mobile recharging platform). Prior to this, it raised US$5 million in Series A co-led by SnowLeopard and Paytm in May this year, preceded by US$1 million in an angel funding round a year ago.
Currently, Jugnoo’s services are available in 22 cities — Chandigarh, Ludhiana, Amritsar Jaipur, Gurgaon, Indore, Delhi, Ahmedabad, Pune Nasik, Jodhpur, Surat, Vadodara, Nagpur, Noida, Hyderabad, Bhubaneshwar, Guwahati, Mysore, Udaipur, Kota Coimbatore. The duo claims that it is witnessing around 15,000 daily transactions and has a user base of one million.
Unitus Seed Fund-backed mGaadi is the oldest player in the auto rickshaw segment. According to Jugnoo’s other Co-founder Chinmay Agarwal, the dynamics of this space are completely different.
“Our demography is different, we don’t follow the other players and our focus remains on cities which may be small but have high potential. We do not focus on creating new supply, rather we leverage what is already there. Our engagement with drivers and customers is what we focus on.”
He continues, “Surviving is what we are good at. We don’t want to unnecessarily dedicate our resources to win against anyone and we want to scale our speed even if it is in their shadows. We’d rather let the biggies make mistakes and solve problems than get impatient to win and drain our resources. The advantage of being small is that the speed of execution is much fast, so while we understand our weaknesses; we’d rather focus on our strengths and do our thing.”
Auto with a click
The company’s ultimate goal is to take technology to every household in India for making commuting easy and quick. Most of India’s population is contingent on local transport, which is what the startup wants to focus on.
“It is often a cumbersome process to step out and search for a source of local commute mode in the scorching sun or at night. When you can avoid the overhead with a tap on the mobile, life becomes easier, says Singla.
“This is how our customers save time and trouble with our economical rides. For an auto rickshaw driver, if he gets a ride request in his vicinity without riding around in the city, a lot can be saved at his part. Adding to this, a driver also has the flexibility in picking up rides. We have managed to add value to the livelihood of our primary stakeholders,” Singla explained.
Jugnoo’s ultimate aim is to be in every city of India and also are exploring joint ventures internationally. There are acquisitions and synergies underway which will boost its plans and transaction targets of a million per day in the coming few months, says Agarwal.
Talking about the key challenges the startup is facing, Agarwal adds, “It is tough to convince the drivers to get on a smartphone, most of who know how to use it, but are reluctant to use it for activities that can impact their livelihood directly. So a lot of convincing and training is needed to get them comfortable on this platform.”
The company says the fund it raised recently will help its pan-India expansion plans and streamline processes in all new cities. “There is still a lot to be done in this space, we basically want all autos to come on our platform and as we launch new cities, we also need to sustain the older ones and keep expanding our reach there as well,” concludes Agarwal.
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